Avakian – Financial Treason & Crime

China’s Luckin Coffee fined $180m for accounting fraud

Pat Sweet, 17 December 2020

The company, founded in 2017, was one of the few Chinese companies listed on the US NASDAQ exchange until it de-listed in July this year following the admission of a series of financial scandals. The US regulator said its investigation found Luckin had defrauded investors by materially misstating the company’s revenue, expenses, and net operating loss in an effort to falsely appear to achieve rapid growth and increased profitability and to meet the company’s earnings estimates.

The SEC alleged that, from at least April 2019 to January 2020, Luckin intentionally fabricated more than $300m in retail sales by using related parties to create false sales transactions through three separate purchasing schemes. Continue reading “Article: China’s Luckin Coffee fined $180m for accounting fraud”

SEC Charges Russian National for Defrauding Older Investors of Over $26 Million in Phony Certificates of Deposit Scam

US SEC, 13 March 2020

The Securities and Exchange Commission today announced charges against Denis Georgiyevich Sotnikov and entities he controlled for allegedly participating in a fraudulent scheme to lure U.S. investors into buying fictitious Certificates of Deposit (CDs) promoted through internet advertising and “spoofed” websites that mimic the actual sites of legitimate financial institutions.

According to the SEC’s complaint, the scheme involved purchasing internet ads that targeted investors who were searching for CDs with high rates. The ads allegedly included links to phony websites, which falsely claimed that the firms offering the CDs were members of FINRA and the FDIC, and that deposits were FDIC-insured. When investors called the phone number on the websites, an “account executive” impersonating a real registered representative directed investors to wire funds to so-called “clearing” partners. These alleged clearing partners were entities used by Sotnikov to launder and misappropriate investor funds. Since November 2014, the alleged scheme involved spoofing the websites of at least 24 actual financial firms or using at least 8 fictitious entities, resulting in over $26 million in known investor losses – with many of those losses from older investors who used their retirement savings. Continue reading “Article: SEC Charges Russian National for Defrauding Older Investors of Over $26 Million in Phony Certificates of Deposit Scam”